Just as the U.S. and U.K. gained stability, Japan and the rest of Europe lost their footing. Emerging markets are in similar straits: China is stabilizing, India is experimenting with policy change, and Brazil is sinking into recession. The result? World trade is growing—but only slightly.
In the U.S., bad weather and congressional squabbles resulted in negative 2.1 percent growth in Q1 of 2014. A surprisingly strong rebound of 4.2 percent in Q2 kept the U.S. on its long-term trend of positive but underwhelming gross domestic product (GDP) growth. In Europe, the U.K. maintained its steady growth rate of 0.7 percent and 0.8 percent in Q1 and Q2, respectively, but proximity to Europe limits the U.K.'s growth potential. Greece, Spain, Portugal, and Ireland still show extremely negative performance in terms of GDP and employment.
China, which tops the rankings in Figure 2, appears to be on the right path toward moderating growth and financial risk as its economy transforms from one led by exports to a model focused on internal consumption. Japan, however, is facing a recession on the back of a tax hike prescribed by Prime Minister Shinzo Abe's "Abenomics" policies.
Growth constraints like consumer indebtedness, excessive regulation, low investment, and tight monetary policy are hurting Brazil's economy. The recent presidential elections may not be enough to help Brazil avoid another recession. Finally, India demonstrates the clearest sign of hope as new Prime Minister Narendra Modi brings his economic-policy successes to his country's highest office.
Global container throughput is expected to grow by 1.3 percent in the second quarter after contracting by 5.7 percent in Q1 (Figure 1). Total trade should grow by 1.3 percent in Q2 after flatlining at 0.1 percent in Q1. Total trade grew for three straight quarters in 2013, which suggests that trade might escape the contractionary trends that have characterized life since the Global Recession.